Competition from industry giants and international trade uncertainties remain key challenges for the company.

Agricultural drone unicorn XAG Technology is heading for a public listing. On the evening of September 25, XAG Technology submitted its prospectus to the Hong Kong Stock Exchange, marking the company's second IPO attempt following its withdrawal from the STAR Board application in 2021. "It's like a student who has studied hard for years and just finished submitting their exam paper," said XAG Technology founder and CEO Peng Bin in a social media post regarding this IPO attempt after 18 years of entrepreneurship.

According to the prospectus, XAG ranks second in the global agricultural drone market, alongside DJI capturing nearly 80% of the market share. In 2024, XAG's revenue exceeded 1 billion yuan, achieving profitability with a net profit of 70.4 million yuan. XAG's main business focuses on agricultural drones, while currently expanding into broader agricultural robotics fields including unmanned ground vehicles and agricultural autopilot systems.

Compared to consecutive losses in 2021, XAG's current performance is more impressive. However, significant challenges remain: competitive pressure from industry giants and uncertainties in international trade. Whether XAG can maintain growth momentum after its IPO still requires market validation.

According to previous prospectus data, XAG's revenue from 2018 to 2020 was approximately 320 million yuan, 360 million yuan, and 530 million yuan respectively, with net losses of 6.7 million yuan, 39.7 million yuan, and 60.8 million yuan. From 2022 to 2024, XAG's revenue grew from 600 million yuan to 1.066 billion yuan, with losses of 250 million yuan and 130 million yuan in 2022 and 2023 respectively, before achieving profitability in 2024 with a net profit of 70.41 million yuan.

In the first half of 2025, XAG reported revenue of 745 million yuan, a 2% year-over-year increase, with period profit of 130 million yuan, up 49.1% year-over-year, and a gross margin of 34.3%.

In a previous media exchange, Peng Bin discussed the turnaround to profitability, stating that "one reason driving profitability is pressure from the broader environment." Times have changed - in 2020, the industry focused on fundraising and burning money to grow bigger and stronger, but today it's about increasing revenue and reducing costs to keep companies alive through "cost control and sales growth." Peng Bin frankly admitted that companies still losing money today will find it difficult to survive into the future.

However, the prospectus notes that past revenue cannot serve as an indicator of future performance. As the company continues to expand business operations and invest in research and development, future costs and expenses will increase. If insufficient revenue cannot be generated and expenses cannot be managed, XAG may face losses in the future.

XAG's revenue comes from selling agricultural robots, including agricultural drones, agricultural unmanned ground vehicles, agricultural autopilot systems, smart farm IoT products, and accessories. However, the overall agricultural robotics sector is still in its early commercialization stage. Currently, agricultural drones remain XAG's primary revenue source, accounting for 87.8% of revenue in 2024.

According to Frost & Sullivan reports, the global agricultural robotics market is expected to grow from 8.9 billion yuan in 2024 to 74.9 billion yuan in 2029, with a compound annual growth rate of 53.3%. The Chinese agricultural robotics market is projected to grow to 20 billion yuan.

The low-altitude economy is gaining momentum, with agricultural labor shortages and increasing demand for precision agriculture providing growth foundations for the industry. However, the sector also faces intense market competition and tense international trade environments, while technology is rapidly evolving and requires intensive capital investment.

According to Frost & Sullivan, XAG ranks second in both global and Chinese agricultural drone markets, with market shares of 17.1% and 20.8% respectively in 2024. However, industry leader DJI holds over 50% market share in the agricultural drone sector, establishing clear scale and brand advantages.

The prospectus mentions risks, stating that some existing and potential competitors may have competitive advantages, possessing more resources, larger customer bases, or higher brand recognition. If effective competition cannot be maintained, the business may be adversely affected.

International markets are becoming a key growth driver for XAG, but also bring uncertainties. From 2022 to 2024, XAG's overseas business revenue grew from 150 million yuan to 370 million yuan, with international markets accounting for 34.8% of total revenue. The prospectus notes that considering global arable land area is more than 10 times that of China, agricultural robots have enormous market potential worldwide.

However, changes in international trade policies and tariff risks are potential challenges for overseas expansion. The prospectus points out that the United States adjusted tariffs on China multiple times in 2025, reaching as high as 125% at peak stages, currently maintained above 10%, with future changes still possible. If future tariff costs cannot be passed on to customers, or if major market import policies tighten, XAG's profit margins and order volumes could be directly impacted.

This prospectus did not disclose the company's valuation, but in July this year, Hurun Research Institute released the "2025 Global Unicorn List," mentioning XAG Technology's valuation at 7.3 billion yuan, ranking 1,183rd on the list.

XAG has previously undergone multiple funding rounds, with investors including Hillhouse Venture Capital, Baidu Capital, SoftBank Vision Fund, China Unicom Guangxin Fund, Sinovation Ventures, and Guangzhou Yuexiu Capital. Before the IPO, Peng Bin holds 29.01% of shares, SoftBank holds 12.86% through SVF, and Guangzhou Yuexiu holds 1.43%.

If XAG successfully passes through the Hong Kong Stock Exchange, Chinese agricultural technology will have more stories to tell. However, industry competition and uncertainties in the international trade environment still constitute major challenges for its future development. Whether this listing can bring new growth momentum remains to be seen through market acceptance and the company's subsequent strategic execution effectiveness.